Additional resources

Michael Marcus: "Trading is something you can learn"

The name
of Michael Marcus is well-known in the United States: he's been a legend of the
futures market since the late eighties. He has turned his initial
thousand-dollar deposit into earnings of around $80m. And, as a fund manager,
he nearly trebled his hedge fund's capital in two years! And now Marcus is
famous in Russia too, since Jack D. Schwager's book
Market Wizards was
translated into Russian. Incidentally, Marcus has always been one of Schwager's
most respected traders.

From a
game of chance...

It all
began in the late sixties of the last century. Marcus was studying psychology
at Clark University, and knew nothing about financial markets. He was expected
to have a career as a lecturer; successful at college, he still never had
enough money (a common thing with students). A classmate by the name of John
told Michael about a "guaranteed" way to earn piles of money for
almost no work. What he had in mind was stock market trading, of course—where
his pal Michael knew about as much as he did.

But
Michael did not immediately work out how uninformed his fellow student was: he
began by following John's "recommendations" blindly. As a result, his
thousand dollars—the money he had managed to save over four years at
college—was almost exhausted in a few weeks. "John treated trading like
betting on the races," Michael would recall later. "He placed his
bets 'intuitively', only covered his positions at a loss, and still passed
himself off as an expert. In the end he and I parted company, and I decided to
trade independently." He borrowed money from relatives to keep trading—and
the second thousand dollars fared better than the first.

Michael
had simply read a few short manuals on trading, and had also—without
particularly getting into details—started to follow advice from a futures
bulletin. His first profit came from following a wheat purchase tip. Soon,
encouraged by his successes, the young trader had created a whole grain
portfolio, and in one summer (1970) he made $30,000 in profit. "A success
like that is the best thing that can happen," says Marcus. But he did not
have enough knowledge or professionalism to hold onto his capital: quite soon,
his own mistakes once again left Michael with nothing.

... to
serious analysis

The
saddest thing is that once Michael had got into trading he gave up his
university studies altogether. A teaching career no longer interested him. So,
after college, he took a job as an analyst with a finance company. The firm did
not allow employees to trade, so Michael took to trading in secret: he saved up
$700 for his next deposit. Studying the market and studying what the
specialists at the company did helped Marcus to understand trading a lot
better.

He made
the acquaintance of several professional traders, and finally realized that the
majority of his failures were purely the result of his own mistakes. Soon
Michael was a capable futures trader, and in 1973 his deposit crossed the
$100,000-dollar barrier. He quickly became a fund manager at a finance
company—and achieved colossal success in the role, earning as much on his own
as all the firm's other traders put together.

The
knowledge he had acquired as a psychology major was undoubtedly one thing that
helped Marcus. But even for a psychologist the burden of the market was
sometimes too much to bear. Michael recounted in an interview how he covered
his Deutschmark futures positions, fearing that the Bundesbank would raise
interest rates. His impulse decision cost $2.5m—and in five minutes' time the
exchange rate had returned to what it was before. By that time, though, Marcus
was so experienced that he could recover even from losses of that magnitude.

Michael
Marcus believes that it takes a special talent to trade at a genius level, and
make astronomical profits. But anyone can learn to work on the financial
markets and make decent money there: anyone can learn, provided they keep
educating themselves and working on their mistakes.

PAMM accounts

Market Info

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RISK WARNING: Trading of complex financial products, such as Stocks, Futures, Foreign Exchange (‘Forex’), Contracts for Difference (‘CFDs’), Indices, Options, or other financial derivatives, on ‘margin’ carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any of these markets you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading these markets, and seek advice from an independent financial advisor if you have any questions or doubts. Please carefully read our full ‘Risk Disclosure’ and ‘Risk Disclosures for Financial Instruments & Investment Services’

LEGAL: ‘fxfinpro.com’ is a domain owned and operated by ‘PFX Financial Professionals Limited’, a limited liability company formed under the laws of Cyprus, registered with the Registrar of Companies in Nicosia, Cyprus, under nr. HE 237840, having its principal place of business at 82 Nikou and Despina Pattichi Avenue, Maritania Court, Office 101, Kato Polemedia, 3070 Limassol, Cyprus. ‘PFX Financial Professionals Limited’ is regulated as a Cyprus Investment Firm (‘CIF’) by the Cyprus Securities and Exchange Commission (‘CySEC’) under license number 193/13. ‘PFX Financial Professionals Limited’ operates in accordance with the Markets in Financial Instruments Directive (‘MiFID’) of the European UnionRESTRICTED REGIONS: PFX Financial Professionals Limited does not provide services to citizens of the USA, Canada, Japan, Belgium, North Korea, or Iran

RISK WARNING: Trading of complex financial products, such as Stocks, Futures, Foreign Exchange ("Forex"), Contracts for Difference ("CFDs"), Indices, Options, or other financial derivatives, on "margin" carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading these markets, and seek advice from an independent financial advisor if you have any questions or doubts. Please carefully read our full "Risk Disclosure" and "Risk Disclosures for Financial Instruments & Investment Services". FXFINPRO Capital is the trading name of PFX Financial Professionals Limited, a limited liability company formed under the laws of Cyprus, registered with the Registrar of Companies in Nicosia, Cyprus, under nr. HE 237840 and regulated by the Cyprus Securities and Exchange Commission with license number 193/13.